Peanut indictments show there's a new sheriff in town, lawyer says

Former officials of a peanut company have been indicted in criminal court on charges of food violations, mail fraud and conspiracy. The indictments are not a surprise, said a prominent lawyer, but should serve to put the food and dietary supplement industries on notice of a more stringent regulatory atmosphere now that FSMA is in full swing.

The indictments relate the to activities of the now defunct Peanut Corporation of America and a related company. Indicted were Stewart Parnell, 58, of Lynchburg, Va.; Michael Parnell, 54, of Midlothian, Va.; and Samuel Lightsey, 48, of Blakely, Ga., have been charged with mail and wire fraud, the introduction of adulterated and misbranded food into interstate commerce with the intent to defraud or mislead, and conspiracy. Stewart Parnell, Lightsey and Mary Wilkerson, 39, of Edison, Ga., were also charged with obstruction of justice.

Also, Daniel Kilgore, 44, of Blakely pleaded guilty to that information, which charged him with mail and wire fraud, the introduction of adulterated and misbranded food into interstate commerce with the intent to defraud or mislead, and conspiracy.

“We’ve been waiting for this for quite some time. People died,” Marc Ullman, an attorney in the firm Ullman, Shapiro & Ullman, told NutraIngredients-USA. “There was a conspiracy to cover it up, there was obstruction of justice.”

9 deaths in outbreak

In 2009, FDA and the US Centers for Disease Control and Prevention traced a national outbreak of salmonella to the PCA plant in Blakely, where peanuts were roasted and made into granulated preanuts peanut butter, and peanut paste.

The indictment alleges that Stewart Parnell, Michael Parnell, Lightsey and Kilgore conspired to ship products they knew were contaminated to customers that ranged in size from small, family-owned businesses to global, multibillion-dollar food companies.

Nine people died and another 681 were sickened in the 2008-2009 outbreak, according CDC. PCA declared bankruptcy in 2009.

FSMA facility suspension

Another more recent case of e-coli-tainted peanuts involved the Sunland plant in New Mexico, which processed organic peanut products. In that outbreak, 42 people in 20 states reported getting sick. In this case, FDA used a new enforcement tool that was not available in 2009; it suspended in the facility’s registration under the Food Safety Modernization Act. Without it, Sunland was out of production starting on Nov. 26, 2012. The suspension was formally lifted on Dec. 21, but Sunland was still out of production until it met all of the stipulations of a consent decree it had signed with FDA.

It should be noted that as of yet no fraud has been alleged in the Sunland case, which extended to dozens of recalls involving separate lot numbers of products. But it highlights the risk to food and dietary supplement manufacturers who don’t take compliance with food and supplement GMPs seriously enough, Ullman said. How many companies would be able to weather the financial storm of having to suspend production for a fiscal quarter or more, not to mention the probable cost of lawsuits?

“Allowing that to happen is inexcusable. Anyone who is involved in the food business should know this is a risk,” Ullman said. “It’s another example of a company not getting a grip of what was going on and trying to limit the recall and making the whole situation worse.”

As FDA fully implements FSMA, bacterial contamination has become a bigger issue, observers say. Inspectors are taking more samples of work and enclosure surfaces to test for contamination. It’s another thing that manufacturers have to be aware of. The supplement manufacturing facilities this reporter has visited do not expose incoming raw material to the outside environment the way the Sunland plant did. Nevertheless, how many are testing for bacterial contamination on their loading dock surfaces?

Strict liability

“Keep in mind in situations of where people should be aware of a risks, like with peanuts or with male enhancement products or weight loss products where spiking with (active pharmaceutical ingredients) is all too common, the Food and Drug Act is a strict criminal liability statute,” Ullman said. Culpability doesn't enter in to it.

“In order to get a misdemeanor conviction of violation of the act, which includes the sale of adulterated food or dietary supplements, all FDA has to show is that you weren’t unconscious when you were selling these products (and they proved to be tainted).”

“We don’t see egregious cases (like PCA) thankfully very often. But I would expect FDA to start bringing these kind of strict liability cases against companies that are selling high risk producsts that can’t be bothered to find out if there is a problem,” Ullman said.

FSMA has as one of its goals to bring structure to the process of prevention of food borne illnesses, Ullman said. The act, he said, could give FDA additional bases for bringing enforcement actions based on what he calls a company’s “willful ignorance.”

For an at-a-glance look at the background to the case, check out this infographic from Sparta Systems:

SpartaSystems

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Former officials of a peanut company have been indicted in criminal court on charges of food violations, mail fraud and conspiracy. The indictments are not a surprise, said a prominent lawyer, but should serve to put the food and dietary supplement industries on notice of a more stringent regulatory atmosphere now that FSMA is in full swing.

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